TRENTON — The federal government has relaxed its demand that New Jersey pay $271 million for Gov. Chris Christie’s decision to nix the rail tunnel under Hudson River. If New Jersey pays the $271 million tab, the federal Department of Transportation will then put $128 million into a fund for future New Jersey transportation projects, according to a deal...
Workers stand near the entrance of the now-canceled Hudson River tunnel project. New Jersey owes the federal government $271.1 million for funds it received before calling off the project. TRENTON — The federal government has relaxed its demand that New Jersey pay $271 million for Gov. Chris Christie’s decision to nix the rail tunnel under Hudson River.
If New Jersey pays the $271 million tab, the federal Department of Transportation will then put $128 million into a fund for future New Jersey transportation projects, according to a deal disclosed in a letter from Transportation Secretary Ray LaHood to U.S. Sen. Frank Lautenberg.
Christie’s office wouldn’t say Tuesday if he’ll take the offer, which was arranged by Lautenberg. The DOT set a Dec. 24 deadline for payment.
Christie, a Republican, and Lautenberg, a Democrat, have traded barbs since the cancellation of the Access to the Region’s Core, or ARC, tunnel. Lautenberg praised the deal Tuesday.
"I have been working since the day Gov. Christie unwisely killed the project to clean up this mess and reduce the cost to taxpayers in our state," Lautenberg said in a statement. "I am pleased that the federal government has agreed to cut the ultimate cost to our state nearly in half — by $128 — million and I will continue to look for other ways to ease the fallout from the governor’s ill-advised decision."
Christie has publicly questioned Lautenberg’s efforts to seek a price reduction from the feds.
Christie’s office, NJ Transit and the Washington law firm hired by the state to combat the $271 million bill all refused to comment when asked about the offer.
"Neither the Governor’s Office or New Jersey Transit has heard from Secretary LaHood," Christie spokesman Michael Drewniak said in an e-mail. "If and when we are contacted by the secretary, we will review their proposal." NJ Transit spokesman Paul Wyckoff and Patton Boggs attorney Stuart Pape deferred to the governor’s office when asked for comment.
After Christie canceled the tunnel on Oct. 27, saying the state could not afford potential cost overruns, the feds presented New Jersey with a $271 million bill for completed preliminary work. Christie balked, calling the bill political and hiring Washington power firm Patton Boggs at $485 an hour to fight the tab.
Lautenberg wrote a letter on Nov. 5 asking LaHood to reduce the cost to the state. LaHood wrote back Tuesday, agreeing to an arrangement in which New Jersey pays the $271 million, but DOT would in turn put $128 million into the state’s Congestion Mitigation Air Quality account to be used on future projects.
The federally-administered CMAQ program provides funding for states for projects, like mass transit and emission reductions, that aim to improve air quality.
The governor’s office would not respond to inquiries about what CMAQ funds could be used for or if any projects that meet those requirements remain unfunded.
In addition to the $271 million in federal money spent on the project, the Port Authority of New York and New Jersey, an agency jointly controlled by the governors of the two states, has spent $200 million to acquire several parcels of land for the project on Manhattan’s West Side.
That land remains in the hands of the bi-state agency, which has not sought reimbursement for its cost. Ron Marsico, a Port Authority spokesman, said it hasn’t been decided what to do with the property.
By Ginger Gibson and Steve Strunsky/The Star-Ledger